The PSBs like State Bank of India and Indian Bank have decided to keep the interest rates unchanged for the corporate borrowers. This is done to provide succour to the borrowers by the PSBs, even for the ones who have faced credit rating downgrades in the past three months of the lockdown.
The PSBs which under normal situation would have increased the borrowing costs for companies facing ration action have now ordered their staff to not raise the costs in such a situation.
Both Punjab National Bank and SBI Bank have confirmed the news of keeping the rates constant despite the companies facing ration action.
Indian Bank general manager said, “Interest rates have fallen significantly over the past few months and we are passing on the benefit to every corporate, irrespective of the rating action being taken on them. So, in a way, we have maintained a status quo.”
The moratorium granted by the RBI to banks for a period of six months has failed to benefit the NBFCs. Even those whose bonds were falling due were not provided with a moratorium benefit. The Indian Ratings and Research care CARE Ratings have shown that for every upgrade there have been about 11 downgrades in the April-May period.
Business loans are now being provided in the form of working capital. The bank credit has recorded a 6.2% growth till June 5 against a growth of 12.3% a year ago.